Deloitte’s Analytics
Symposium 2010
Starting the sustainable
analytic journey
Jane Griffin


October 2010
Agenda


• Analytics vision
• Key analytics principles
• Keys to successful analytic initiatives




1   Starting the sust...
Analytics vision

The process of delivering analytics business results is one of continuous
improvement. Starting anywhere...
Sustaining analytics

Deep analytics pushes insights to frontline decision makers by embedding
capabilities and outputs de...
Link analytics to high-impact areas

A full-scale shift toward analytics is underway today in almost every domain.
Things ...
Weave into organization fibers


No matter where you enter the cycle of
business analytics — analytics insight,
performanc...
Weave into organization fibers (cont’d)


The challenge today is to push
analytics capabilities even deeper into
the organ...
Key analytics principles

Start where                     Assess your current capabilities, get a clear picture of the gap...
Assess and set goals

An honest self-assessment is the first step in understanding your current
capabilities — and the gap...
Assess and set goals

An honest self-assessment is the first step in understanding your current
capabilities — and the gap...
Deliver hindsight, insight, and foresight

Shareholder value is improved when value levers are effectively managed
with in...
Deliver hindsight, insight, and foresight (contd.)

Knowing which questions to ask — where the most relevant and valuable ...
Signal strength

Signal strength in applied analytics calls for moving beyond traditional
structured data and standard too...
Accelerating insights through automation

Embracing applied analytics requires automation across all dimensions of your
an...
Accelerating insights through automation (cont.)

                                      • Implemented an enterprise-wide p...
User engagement and visualization

Well-designed data visualizations and interfaces let the business user act on the
resul...
Building a fact-based culture

Consider using an approach, such as Deloitte’s As One methodology for
assessing your analyt...
Right-fit analytics

The proliferation of tools has already outrun the pool of available talent to use the
tools powerfull...
Keys to successful analytic initiatives

                                        Develop a road map linked to questions, K...
Summary: Starting the sustainable analytic journey

• Analytics is a cycle of improving business
  process performance, no...
Questions?
Contact information

Jane Griffin
Principal
Deloitte Consulting LLP
janegriffin@deloitte.com




21   Starting the sustain...
"This presentation contains general information only and is based on the experiences and research of Deloitte practitioner...
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9. fri 1045 1130 griffin - starting the sustainable analytic journey

  1. 1. Deloitte’s Analytics Symposium 2010 Starting the sustainable analytic journey Jane Griffin October 2010
  2. 2. Agenda • Analytics vision • Key analytics principles • Keys to successful analytic initiatives 1 Starting the sustainable analytic journey Copyright © 2010 Deloitte Development LLC. All rights reserved.
  3. 3. Analytics vision The process of delivering analytics business results is one of continuous improvement. Starting anywhere in the analytics cycle, an organization can immediately begin to address its specific needs. 2 Starting the sustainable analytic journey Copyright © 2010 Deloitte Development LLC. All rights reserved.
  4. 4. Sustaining analytics Deep analytics pushes insights to frontline decision makers by embedding capabilities and outputs deep in the processes of everyday work. But that process has to be wrapped with serious change management for it to stick. Analyze Manage Measure Manage Set Strategy Operationalize Strategy Results Operations Data Set and Predict the Architect and Manage Provide Identifying communicate outcome of the integrate performance “alerts,” sources of key enterprise strategy and predictive with metrics identify the data, govern, strategy integrate into models into and processes problem and integrate, operations process, via analytical recommend cleanse, and technology, and applications corrective organize then workforce action deliver it Design Direct Sense Direct Architect Measure Operate Govern Direct Direct Direct Direct Direct Direct Direct Direct Direct Direct Communicate Predict Integrate Direct Monitor Report Monitor Direct Direct Direct Direct Direct Direct Direct Direct Direct Direct Direct Integrate Implement Correct Respond Correct Direct Direct Direct Direct Direct Direct Direct Direct Direct Direct 3 Starting the sustainable analytic journey Copyright © 2010 Deloitte Development LLC. All rights reserved.
  5. 5. Link analytics to high-impact areas A full-scale shift toward analytics is underway today in almost every domain. Things have gotten so complicated, that shooting from the hip has lost its allure. For some that is a welcome change. For others it is something to resist. It all depends on perspective. Every domain must be optimized to meet demands. Product Management • Product Pricing, Product Profitability, Portfolio Optimization Market/ Product Customer Management Sales Mgmt Mgmt • Lifetime Value, Customer Segmentation, Loyalty, Customer Experience, Profitability, Churn Service/Operations Management Supplier/ Customer • Customer Experience, Capacity Planning/Demand Advanced Partner Mgmt Forecasting, Capital Expenditure, Performance, Analytics Mgmt Leakage/Shortfall, Workforce Effectiveness Enterprise Management • Fraud, Revenue Assurance, Asset Utilization, Security, Enterprise Service/ Collections, Advanced Forecasting Mgmt Ops Mgmt Supplier/Partner Management • Vendor Efficiency, Contract Compliance, Vendor Optimization Market/Sales Management • Channel Optimization, Campaign Performance, Up selling, Cross-selling 4 Starting the sustainable analytic journey Copyright © 2010 Deloitte Development LLC. All rights reserved.
  6. 6. Weave into organization fibers No matter where you enter the cycle of business analytics — analytics insight, performance optimization, information management — the challenges of execution and adoption are similar. Organization that have mastered applying analytics to support enterprise decision-making tend to focus on seven key principles as they strive to accelerate workforce adoption and capture more value. 5 Starting the sustainable analytic journey Copyright © 2010 Deloitte Development LLC. All rights reserved.
  7. 7. Weave into organization fibers (cont’d) The challenge today is to push analytics capabilities even deeper into the organization. from business executives to the front lines in a coordinated fashion. This requires both a new level of focus and dexterity. To be effective, organizations must employ the right discipline, methods, personnel, technologies, and data. 6 Starting the sustainable analytic journey Copyright © 2010 Deloitte Development LLC. All rights reserved.
  8. 8. Key analytics principles Start where Assess your current capabilities, get a clear picture of the gaps. Focus you are on low-hanging fruit and develop a long-term analytics road map Crunchy Know which questions matter most to your industry, strategy, questions and priorities Detect and respond to signals better and faster is the key to achieving Signal strength competitive advantage Accelerating Automate delivery of the information — to management, operational, insights and analytical processes User engagement Output must deliver insights people need — in whatever forms they and visualization need – to make fact-based decisions Fact-driven Embed analytics capabilities into decision-making processes matching culture your approach with your style Right fit analytics Match statistical and analytics techniques to the job at hand. 7 Starting the sustainable analytic journey Copyright © 2010 Deloitte Development LLC. All rights reserved.
  9. 9. Assess and set goals An honest self-assessment is the first step in understanding your current capabilities — and the gaps you’ll need to close to get more value from your analytics investments. Think in terms of both technical capabilities and organizational depth. Nonexistent Developing Defined Advanced Leading • Hindsight driven • Functional level • Competitive • Analytics key • Analytics-driven Advanced Analytics • No market insight • Across few domains advantage analytics • Analytics incentives strategy • No analytic • Deliver token results • Executive support • Operationalized • Global analytics applications • Analytics isolated • Analysts disparate • Leveraging analytical • Analytics integrated • Analytics isolated tools • Analytics mainstream • Excel-based • • • • PM is analytics-driven Management Intelligence Management Business Performance Market driven KPIs defined Integrated PM • Budget analysis • Finance has PM skills • Linked KPIs • Value-lined KPIs • PM COE disseminate • Process-level • Aspiration for more • Sophisticated skills • Aligned incentives skills decisions • Scorecards tools • Standardizing PM • Integrated PM • Predictive modeling/PM • BI limited to reporting • BI skills in IT • BI strategy defined • BI governance • Strategy driven • BI skills basics • Data unreliable • BI-driven strategy • BI/BA skills in IT • BI/BA resources • BI isolated • Dedicated BI team • BI architecture • Standardized BI tools • DW established • Owners of BI • Full level of BI tools • Information-driven • No governance • Limited DM skills • DM governance • Full data governance • High-quality • Little data quality • Developing DM • EIM architecture • DM team integrated data/MDM Data • No MDM processes • Data quality/MDM • MDM implemented • Skilled DM resources • No IT BI/DM skills • Recognize need • Dedicated DM team • Mature DM tools • IBI/DM governance • Standard DM 8 Starting the sustainable analytic journey Copyright © 2010 Deloitte Development LLC. All rights reserved.
  10. 10. Assess and set goals An honest self-assessment is the first step in understanding your current capabilities — and the gaps you’ll need to close to get more value from your analytics investments. Think in terms of both technical capabilities and organizational depth. Nonexistent Developing Defined Advanced Leading • Hindsight driven • Functional level • Competitive • Analytics key • Analytics-driven Advanced Analytics • No market insight • Across few domains advantage analytics • Analytics incentives strategy • No analytic • Deliver token results • Executive support • Operationalized • Global analytics applications • Analytics Isolated • Analysts disparate • Leveraging analytical • Analytics integrated • Analytics isolated tools • Analytics mainstream • Excel-based • • • • PM is analytics-driven Management Intelligence Management Business Performance Market driven KPIs defined Integrated PM • Budget analysis • Finance has PM skills • Linked KPIs • Value lined KPIs • PM COE disseminate • Process-level • Aspiration for more • Sophisticated skills • Aligned incentives skills decisions • Scorecards tools • Standardizing PM • Integrated PM • Predictive modeling/PM • BI limited to reporting • BI skills in IT • BI strategy defined • BI governance • Strategy driven • BI skills basics • Data unreliable • BI driven strategy • BI/BA skills in IT • BI/BA resources • BI isolated • Dedicated BI team • BI architecture • Standardized BI tools • DW established • Owners of BI • Full level of BI tools • Information-driven • No governance • Limited DM skills • DM governance • Full data governance • High quality • Little data quality • Developing DM • EIM architecture • DM team integrated data/MDM Data • No MDM processes • Data quality/MDM • MDM implemented • Skilled DM resources • No IT BI/DM skills • Recognize need • Dedicated DM team • Mature DM tools • IBI/DM governance • Standard DM 9 Starting the sustainable analytic journey Copyright © 2010 Deloitte Development LLC. All rights reserved.
  11. 11. Deliver hindsight, insight, and foresight Shareholder value is improved when value levers are effectively managed with indicators, that provide lagging, leading, and predictive information, based on reliable internal and external structured and unstructured data. Shareholder Value Revenue Growth Risk Management Asset Efficiency Operating Margin Dimensions Value Mitigate Increase Strengthen Corporate/ Improve Improve Improve Grow Investor Improve Improve Production Pricing and Planning and Working Supply Chain Regulatory Trust Asset Use F&D Costs Growth Royalty Analysis Capital Insight Risks Lever Value Improve optimization of Reduction in downtime Field improvements Reduce off-contract transportation scheduling associated with and reliability spend and leakage and drilling plans equipment failures Indicators Predictive Indicators Leading Indicators Lagging Indicators Location Data Well Data Material Data Vendor Data Data Product Data Asset Data Pricing Data Financial Data Hierarchies and Sub-Surface Sensor Data Human Resource Data Land Lease Data Categorization Data 10 Starting the sustainable analytic journey Copyright © 2010 Deloitte Development LLC. All rights reserved.
  12. 12. Deliver hindsight, insight, and foresight (contd.) Knowing which questions to ask — where the most relevant and valuable insights are likely to be found — is the foundation of any analytics initiative. It requires collective intelligence that spans industry, function, and technology. Shareholder Value Using your strategy and business processes you determine: • What drives value? Revenue Growth Risk Management Dimensions Asset Efficiency • What questions do I need to ask? Operating Margin • How do we measure up? Value Increase Strengthen Mitigate • What investments drive the highest return? Improve Improve Improve Pricing Corporate/ Production and Regulatory • What information doImprove to answer these important questions? Planning and Grow Investor Trust I need Asset Use Working Supply Chain Improve F&D Costs Growth Analysis Capital Insight Royalty Risks Lever Value Improve optimization of Reduction in downtime Field improvements Reduce off-contract transportation scheduling associated with and reliability spend and leakage and drilling plans Critical information model must be organized, aggregated, equipment failures standardized, and accessible to answer critical business Indicators Predictive Indicators questions, provide foresight, insight, and measure success Leading Indicators Lagging Indicators Identify authoritative information source for priority data needs Location Data Well Data Material Data Vendor Data Apply business process analytical and asset intelligence to Data Product Data monitor decisions, strategies, and transition optimization Asset Data Pricing Data Financial Data and risk Hierarchies and Sub-Surface Sensor Data Human Resource Data Land Lease Data Categorization Data 11 Starting the sustainable analytic journey Copyright © 2010 Deloitte Development LLC. All rights reserved.
  13. 13. Signal strength Signal strength in applied analytics calls for moving beyond traditional structured data and standard tools to advance sensors, exploratory data analysis, and knowledge discovery. Wisdom of crowds Equipment E-mail Facilities Videos Energy Signal analysis ???? Action Excel Economic Operational Geological Systems Climate Social Web analytics 12 Starting the sustainable analytic journey Copyright © 2010 Deloitte Development LLC. All rights reserved.
  14. 14. Accelerating insights through automation Embracing applied analytics requires automation across all dimensions of your analytics operations. In short, automate delivery to process and people and need to automate responses — so that action is taken with certainty and at the lowest cost. • Conducted analysis on historical transactional data Transactional to identify improvement opportunities pricing assessment • Developed a business case detailing opportunities (TPA) and implementation plans • Revised the price optimization models to allow for more accurate and timely pricing Price • Incorporated data from the TPA to allow for more optimization granular price setting • Revised the retail store performance criteria to focus on individual store profitability Corporate pricing • Renegotiated contracts with large wholesalers and strategy dealers where margins were poor 13 Starting the sustainable analytic journey Copyright © 2010 Deloitte Development LLC. All rights reserved.
  15. 15. Accelerating insights through automation (cont.) • Implemented an enterprise-wide pricing software August Performance Project Performance Route Baseline Target Actual, Actual Chart Volume Clients Chart Volume Clients to-date 201 13% 12% 12% 0% -3% 12% -1% -4% 202 11% 14% 10% -1% -4% 12% -1% -5% Pricing technology tool to support the new processes 203 204 30% 17% 16% 10% 29% 12% -4% -1% -2% -3% 28% 12% -5% -1% -2% -5% and data • Aligned and integrated with the concurrent global 205 206 13% 27% 12% 14% 12% 26% +1% 0% -1% -2% 14% 27% 0% 0% -3% -2% 5% 10% 15% 20% 25% 30% 5% 10% 15% 20% 25% 30% management SAP implementation Total Legend: 12% 21% -2% -3% 22% -3% -4% Target Actual Baseline Payout Tiers: Supervisor Example • Developed compensation plans for the sales 15% Bonus as a % of Compensation 11% 10% Organizational organization that are aligned with profitability 7% alignment and • Revised commission structure to be based on mix 3% compensation of volume and margin -1% 0% 50% 100% 150% 200% 250% CC. Attainment Payout Curve Actual Payment Example: Field Team 1 • Utilized a ―high touch‖ implementation to train the … Wk1 Wk2 Wk3 Wk4 Wk5 Wk6 Wk7 Wk8 Wk9 Wk10 Wk11 Wk12 Wk13 Wk14 Wk15 Wk16 Wk17 Wk18 Wk19 Wk20 DC 1 DC 2 DC 3 field sales team in pricing and profitability DC 4 DC 5 Corporate HQ Field execution • Developed the appropriate cadence of review Socialization at Corporate Level Regional kick-off and prep work Kick-off and prep work Work at Corporate HQ Follow-up Work Pilot closure activities to allow for measurable progress Initial Workshop Virtual Follow-up 14 Starting the sustainable analytic journey Copyright © 2010 Deloitte Development LLC. All rights reserved.
  16. 16. User engagement and visualization Well-designed data visualizations and interfaces let the business user act on the results, or drill down for more information. Involve the user in the design: They will tell you when the amount of information they’re getting in each display is too much, too little, or just right. 3500 Clustering and anomaly detection 3000 identifies health care providers that consistently claim higher charges Number of Patients 2500 Suspect Provider 2000 1500 1000 Specialty Providers 500 0 $- $10,000.00 $20,000.00 $30,000.00 $40,000.00 $50,000.00 $60,000.00 Cost/Claim Each point represents one in-patient provider’s claims in a fiscal year 15 Starting the sustainable analytic journey Copyright © 2010 Deloitte Development LLC. All rights reserved.
  17. 17. Building a fact-based culture Consider using an approach, such as Deloitte’s As One methodology for assessing your analytics environment’s ability to drive execution throughout the organization. The methodology helps evaluate support for an organization’s analytics priorities and develop targeted interventions. Leaders who Proactive Ask tough Educate and Stand by Reward Measure what serve obsolescence questions prepare your facts adoption matters Make sure you Drop tools that Insist on Get out ahead One version Use carrots, Get good at walk the talk don’t work evidence of change of truth not just sticks crunchy A CFO who The smart way When reviewing No matter what One adoption Once you have Expand your says, ―These to make sure decisions made your approach barrier is a fear a stable model data model for are the inputs I outdated ideas by others, ask to change that analytics in place, begin reporting KPIs use to make are eliminated to see analytics management, aren’t reliable to link desired to measure how decisions‖ will is to forbid their that went into training related facts. Develop a behaviors to many decisions go a long way continued use. the decision- to expectations, system of incentives and your people are to ensure making resources, and certification to compensation making, as well adoption of process. benefits will be define selected and their those inputs by needed. Plan reports and effectiveness. others. Ask about fact- for them findings as based inputs ―official.‖ as well as assumptions. As used in this document, ―Deloitte‖ means Deloitte Consulting LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. 16 Starting the sustainable analytic journey Copyright © 2010 Deloitte Development LLC. All rights reserved.
  18. 18. Right-fit analytics The proliferation of tools has already outrun the pool of available talent to use the tools powerfully in today’s business. That leads to two big challenges: setting the overall analytics strategy and then getting the work done. An experienced and disciplined team of partners is essential to navigate the complexity. Business Challenges Constraints Solutions Efficiency Budget CRISP-DM Staffing Linux S/CMM SAS SQL Server Infrastructure Clustering Cost Experian SPSS UNIX Licensing SVM Windows Rapid Solaris CART Risk Tolerance Miner Oracle Risk Regression Urgency Security End Users 17 Starting the sustainable analytic journey Copyright © 2010 Deloitte Development LLC. All rights reserved.
  19. 19. Keys to successful analytic initiatives Develop a road map linked to questions, KPIs, value and Value-driven resolves related issues, and challenges and opportunities rationale associated with achieving those objectives Integrate the initiatives and projects required to address the Integrated data- related issues, challenges, and opportunities into a structure and measurable value common structure for managing progress and measuring value across the enterprise A single shared end-state architecture and data governance Coherent framework underpins delivery of improved access to high- enterprise-wide quality information across the enterprise end-state The road map should be designed to evolve and will require Living and regular updates and maintenance throughout the multiyear evolving program delivery program 18 Starting the sustainable analytic journey Copyright © 2010 Deloitte Development LLC. All rights reserved.
  20. 20. Summary: Starting the sustainable analytic journey • Analytics is a cycle of improving business process performance, not a project • Focus on high-impact areas, meaningful measures, available signals • Move beyond the hindsight of traditional business intelligence with advanced analytics that enable deep insight and distant foresight • Encourage a fact-based culture that values the opportunities evident in information over conjecture or speculation 19 Starting the sustainable analytic journey Copyright © 2010 Deloitte Development LLC. All rights reserved.
  21. 21. Questions?
  22. 22. Contact information Jane Griffin Principal Deloitte Consulting LLP janegriffin@deloitte.com 21 Starting the sustainable analytic journey Copyright © 2010 Deloitte Development LLC. All rights reserved.
  23. 23. "This presentation contains general information only and is based on the experiences and research of Deloitte practitioners. Deloitte is not, by means of this presentation, rendering business, financial, investment, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte, its affiliates, and related entities shall not be responsible for any loss sustained by any person who relies on this presentation. About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. "This presentation contains general information only and is based on the experiences and research of Deloitte practitioners. Deloitte is not, by means of this presentation, rendering business, financial, investment, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte, its affiliates, and related entities shall not be responsible for any loss sustained by any person who relies on this presentation. Copyright © 2010 Deloitte Development LLC. All rights reserved. Member of Deloitte Touche Tohmatsu Limited

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